1 Functional Areas as Sources of Learning and Innovation: The Multiple Faces of R&D, Manufacturing and Marketing Marcel Bogers Mads Clausen Institute for Product Innovation University of Southern Denmark bogers@mci.sdu.dk Stéphane Lhuillery College of Management of Technology Ecole Polytechnique Fédérale de Lausanne stephane.lhuillery@epfl.ch Version: October 30, 2009 ABSTRACT Scholars of innovation have extensively explored the role of research and development (R&D) in learning and innovation. However, two questions have received relatively little attention. First, what is the exact role of non-R&D activities in learning and innovation? And second, how do intra- and inter-organization learning and innovation relate to each other? In this paper, we argue that different functional areas in the firm—not only R&D, but also manufacturing and marketing—all rely on external knowledge for their contribution to innovation. Using survey data and multi-equation regression, we show that R&D, manufacturing and marketing rely on different external sources of knowledge, with important differences between product and process innovation. We also find evidence for complementarities between the functional areas and between product and process innovation. Keywords: Product innovation; process innovation; open innovation; absorptive capacity; R&D; manufacturing; marketing; cross-functional interfaces; complementarities Word count: 9031 Acknowledgements: We would like to thank the participants of the Economics of Technology Policy Conference (June 17-22, 2007) and the Academy of Management Meeting (August 8-13, 2008) where previous versions of this paper were presented. We are particularly grateful to Allan Afuah, Paul Beije, Jan Fagerberg, Dominique Foray, Marc Gruber, Mette Praest Knudsen, Keld Laursen, Christopher Tucci and Anu Wadhwa for their constructive comments that helped us to improve this paper. We also thank the KOF at ETH Zurich for data access. The financial support of the Swiss National Science Foundation (grant 105512-106932) is gratefully acknowledged.